Long awaited changes in car registration tax finally in place

Yesterday car dealers and consumers finally got a deal enabling car sales to take off again. The past four weeks car sales had virtually plummeted as consumers were waiting for the outcome.

By Bente D. Knudsen

Last night Finance Minister Kristian Jensen did his best to convince the DR 1 journalist that the deal was a good deal and in line with what Venstre had promised to do – lower the exorbitantly high Danish car taxes.

However, the deal is a compromise and quite far from what had been promised.

Venstre went to the negotiation table promising a level of 100 percent for all cars – enabling Danes to buy a Lamborghini should they so desire – as a minister had the bad fortune to pronounce.

However, cars in Denmark remain expensive – even if there from the 1 October 2017 are savings to be made on the middle class cars and cars with a high level of security as well as cars that have a high fuel economy i.e. consume less gasoline or diesel per driven km.

The rates change so that the first DKK 185,000 ( of the car’s sales price) are imposed with 85 percent car registration tax (down from 105 percent up to the first DKK 106,600). Cars priced above DKK 185,000 stay at the 150 percent car registration tax but benefit from the level difference.

A few smaller cars will become more expensive as they are rated less secure.

This is amongst other because the general tax reduction for the safest cars is increased from DKK 2,000 to DKK 8,000 for cars that have been awarded with five stars by the international safety test Euro NCAP.

Also the added tax for cars with a negative fuel economy is increased from the DKK 1,000 today to DKK 6,000 as of 1 October 2017.

Below you can find the Danish Finance Ministry’s estimate of the effect on the prices the lower car registration tax will have on a few examples.

Take note there may be price variations at the individual car dealers that will affect the tax calculation. These changes are therefore indicative.